Iowa Adopts New Requirements for Health Care Employment Agencies Dentons

Legislation passed at this session of the Iowa General Assembly adopts new requirements and restrictions for health employment agencies that provide health organizations with workers from agencies that provide nurses or other services to consumers through personal contact. There are exceptions for doctors and practicing nurses. “Healthcare” means a licensed or certified facility, organization or agency managed to provide services or support to meet the health or personal care needs of consumers.

The new legislation requires a health employment agency:

  • Register annually with the Iowa Department of Inspections and Appeals (“DIA”)
  • Refrain from restricting workers through agencies to seek employment opportunities, including in the health company in which they were employed
  • Refrain from including non-employment clauses in contracts with clients of a healthcare professional that do not allow the client to hire an employee in the agency
  • Refrain from engaging in any agreement with an agency employee or client of a healthcare company, any unpaid damages, work fees or other penalties or fees if the agency employee is employed by the healthcare company
  • Make sure that the employees of the agency comply with all health requirements and the requirements of the staff providing services in the healthcare facilities.
  • Employees in document agencies meet all licensing, certification, education, training and healthcare requirements for their position and provide documentation to regulators and other external parties that would otherwise be the responsibility of the healthcare professional if the worker covered were directly employed by him.
  • Maintain professional indemnity insurance covering agency workers with limits of at least $ 1 million per event and $ 3 million in total

A health employment agency that provides agency workers to health organizations certified by Medicare or Medicaid must also submit quarterly reports to the DIA outlining the average amount charged to the company and the average amount paid to agency workers. Any health employment agency that violates the restrictions on “no employment”, penalties or other clauses limiting the employment opportunities of employees in the agency or that knowingly provides an employee of the agency who illegally or fraudulently obtained a license, certificate, registration or Iowa’s business registration will be revoked, and the agency and the agency’s manager will be restricted from doing business in Iowa as a health employment agency for two years.

The new requirements come into force on July 1, 2022; however, later legislation, which was eventually passed by both the House of Representatives and the Senate but has yet to be signed by Governor Reynolds, provides for provisions restricting agencies from including or imposing non-competition, non-employment clauses “And provisions for penalty in force for contracts concluded on or after 1 January 2019.

Legislation is widely developed, and while physicians and nurse practitioners are not considered “agency workers,” all other persons providing nurses or services requiring personal contact with consumers are considered “agency workers.” This seems to include medical assistants, nurses, assistants and radiological and laboratory technicians. The definition of ‘health employment agency’ is also quite broad, including agencies that provide temporary, temporary employment, direct contracts or other contractual or staff recruitment. It is unclear whether the new legislation will apply to healthcare providers who may enter into shared staffing or staffing agreements with other providers who are considered to be healthcare professionals under the new legislation.

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